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Bainbridge has draft agreement in hand for KPUD takeover of city water system

Bainbridge Island's City Manager Doug Schulze will present a draft contract this week to the city council that aims to outsource management of the city's water system.

But the contract with the Kitsap Public Utility District is absent one key detail: a price tag.

The cost of management has been left blank in the draft, but the city will be given an annual bill and will pay KPUD on a bi-monthly basis.

Schulze had previously reported in March to the city council that it would cost the island more money to outsource the water utility by approximately $100,000. Schulze told the council that the only way to get specific numbers and find the exact cost would be to draft a contract with KPUD.

Some on the council, however, were not swayed by the news and requested that Schulze negotiate with KPUD and get exact numbers.

The five-year term contract does provide other details, however, on a potential arrangement between the city and KPUD. The draft agreement includes provisions on insurance, responsibility for repairs, B&O taxes and billing, among other items.

The city will pay for any repairs to the utility's system that are more than $3,500. KPUD will handle any repairs below that amount.

The contract notes that KPUD will require additional employees to handle the takeover of the city's water system. Some employees would be shed from the city and picked up by KPUD, and the city employees would be transferred to new district jobs to work on the island's utility.

An attachment to the contract that specifies which employees would be retained by KPUD has not yet been finalized by the city and KPUD.

Other costs mentioned in the contract, without specific numbers, include the insurance each party would agree to purchase to provide general liability, as well as workers' compensation and employer's liability. KPUD would agree to maintain property damage insurance on the city's water facilities.

The city will hold responsibility for the budget for capital improvements such as constructing new water mains, reservoirs, or the replacement of meters and pump stations.

Under the proposed agreement, KPUD will step in to manage the Capital Improvement Program for future improvements to the city's water system. The outside manager will also manage current water-related capital projects for an additional fee of 4.5 percent of the projects' costs.

The city council is scheduled to discuss the draft contract at its Wednesday meeting.

The meeting begins at 7 p.m. and the water utility discussion is roughly scheduled for around 7:45 p.m.

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